I don't think this is malice. This is more likely an artifact of a history where encryption was not initially part of the protocol, and seamless fall back had to be supported.
No production basestation ever used the "no encryption" mode. No handset should ever accept using it, just as no browser will accept to using the NULL cipher. So what is the justification 25 years on?
I remember seeing "lawful intercept" being mentioned somewhere in the GSM standards, and it seemed they were certainly not opposed to it...
they don't have the option to oppose (in the US, at least):
And the same has been true in practically all countries, democratic or not, developed or not, ever.
Perhaps many phones don't, hence the many complaints that "phones stopped working" when the surveillance vehicle was nearby.
They stop working maybe because the stingray is only collecting identifiers instead if conducting a true MITM attack and forwarding any calls por SMS's. In any case, I suspect they could only do a MITM to outgoing traffic, so any incoming traffic/data would not be delivered, like the phone is out of service/no network.
GSM crypto was designed to not be strong (in the late 80s).